EU Strengthens Fight Against Terrorist and Criminal Financing

2.23.53pm UTC (GMT +0000) Wed 25th May 2005

The European Parliament is set to vote on a new and strengthened EU Money- Laundering Directive, which improves the detection and prevention of illegal funding of terrorism and crime. Baroness Sarah Ludford, London Liberal Democrat MEP and the party's European Justice spokeswoman said:

"This third EU money-laundering Directive is welcome for at last emphasising a risk-sensitive approach. This means applying stricter money laundering controls in higher risk situations, such large cash transactions, but hopefully slimming down when possible."

"At present there are 50,000 alerts a year in the UK, but watchdogs lose sight of the wood for the trees! There needs to be more concentration on busting the criminal and terrorist financing networks."

"I call on banks to make a reality of proportionate checks, so that the ordinary person trying to open an account is not swamped in red tape while the arms and drugs traffickers and greedy dictators literally get away with murder."

"This new law will simplify the process for European citizens wanting to open a bank account in another EU country, as that bank will not have to carry out further identity checks. This will help make free movement in the EU a reality, so that Brits moving to Spain or a Polish student coming to university in London should not face a lot of hassle."

The proposed Directive reflects updated international guidance. A wider range of professionals and firms, including lawyers, accountants, estate agents and casino operators, as well as banks and other financial institutions, will all be subject to the legislation. So will firms potentially vulnerable to misuse, such as those which help set up companies and operate trusts. There is a requirement to identify the people behind the company, the true 'beneficial owners' of more than 25%.

Any suspicious financial transaction that might be linked to serious crime or terrorist activities must be reported to a national financial intelligence unit, which all EU states are required to establish; in the UK, the National Criminal Intelligence Service, NCIS.

ENDS